The Companies Act, 2013 requires every company and its authorized officers to ensure orderly management and reporting of certain secretarial documents, registers, annual compliance(s), and file intimation on the occurrence of notified events.
Every company is required to maintain specified records and registers to ensure compliance and promote transparency. As per the act, these records must be kept at the registered office of the company and be made accessible to any stakeholder who may request access.
Different types of records and registers that are required to be maintained as per the Companies Act, 2013:
At the end of each financial year, every Indian company is required to file its annual financial statements and summary of accounts with the Registrar of Companies along with a return having details about the various activities undertaken during the respective financial year.
Several other forms and documents are also required to be filed by the company along with this annual return. These forms are required to be certified by a practicing Chartered Accountant or a practicing Company Secretary.
Other annual compliances include circulation of financial statements & other relevant documents, convening the annual general meeting (AGM), appointing statutory auditors, filing annual electronic forms including XBRL filing of financial statements, annual returns, etc.
Below are a few notified events, the occurrence of which needs to be intimated to the Registrar of Companies by filing specified forms:
Every company and its officers must ensure timely filing of statutory returns with the Registrar of Companies in strict compliance with the requirements of the Companies Act. If a company fails to comply with the requirements of the Companies Act, the company, every director, secretary /and manager of the company are liable to penalty and/or prosecution.
SSI has a qualified team of experienced lawyers, qualified company secretaries, and well-trained finance professionals who have the immensely practical, technical knowledge and required expertise who assist all our clients to ensure effective compliance management and deal with issues in corporate legal, secretarial compliance and maintain proper Corporate Governance.
A secretarial Audit is an independent, objective assurance intended to add value and improve an organization’s operations. It helps to accomplish the organization’s objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. Secretarial Audit has not been made mandatory for private companies and small public companies. These companies may adopt secretarial audit practices for ensuring compliance and avoiding the risks associated with non-compliance.
As per section 204(1) of Companies Act, 2013 read with rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following companies are required to obtain Secretarial Audit Report:
Secretarial Audit facilitates monitoring compliances with the requirements of the law through a formal compliance management program which can produce positive results to the stakeholders of a company:
a)Promoters Secretarial Audit assures the promoters of a company that those in charge of its management are conducting its affairs by the requirements of laws and the owners’ stake is not being exposed to unintended risk.
b)Non-executive/Independent directors Secretarial Audit provides comfort to the Non-executive/Independent Directors that appropriate mechanisms and processes are in place to ensure compliance with laws applicable to the company, thus mitigating any risk from a regulatory or governance perspective.
c)Government authorities/regulators It also facilitates reducing the burden of the regulators in ensuring compliances and they can take timely actions against the offenders.
d)Investors Secretarial Audit helps the investors in making an informed investment decision, as it evaluates the company in terms of compliance and governance norms being followed by the company.
e)Other Stakeholders It is an effective due diligence exercise for prospective investors or joint venture partners. Further Financial Institutions, Banks, Creditors, and Consumers can measure the law-abiding nature of company management.
f)Benefits to the company itself: